Lineberger v. Delaney Petroleum Corp.

FRICKE, J.,

pro tem.

Respondents were at all times the joint owners of a certain parcel of land which they leased for oil development purposes to J. E. O’Donnell and wife. This lease was transferred several times, the last lessee being appellant corporation, which is still in possession. Appellant, in addition to contraction work connected with the production of oil, erected upon the land a warehouse and a field office not used in connection with such production, and stored pipe and other oil equipment on the property which was not used for drilling or operating purposes on the premises. The “lease” declares that the “lessors do hereby grant to said lessee the exclusive right and privilege ’ ’ of entering upon the premises and drilling for and removing oil, gas and other hydrocarbon substances, together with the right to store the same upon the land during the life of the lease, the right to develop water and to construct, use and maintain “all buildings, tanks, sumps, machinery, telephone and telegraph lines and other structures, including all pipe lines, which the lessee may desire in carrying on its business and mining operations on said premises”, and the right of ingress and egress. The lessee agreed to pay as rental or royalty one-sixth of the market price of the oil and gas produced, and agreed not to erect any buildings within 100 feet of Pacific Avenue.

It appears that the field office and warehouse erected by appellant are closer than 100 feet from Pacific Avenue, and there is testimony to the effect that the rental value of the property used by appellant for storage and warehouse purposes, and not used in operating the oil wells on the property, was between $200 and $250 per month. There is also evidence that although no new wells were being drilled and the operations were limited to pumping two wells, appellant used

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all of the land except that occupied by the houses of respondents ; that a piece of land 50 by 150 feet around each of the two wells on the land would suffice to care for the wells; that there was no necessity to use any other portion of the property for such purposes, and that the equipment stored on the lands was not necessary for the wells on the property. Respondents at all times received the royalty or rental provided for by the lease. The president of appellant corporation testified that the company used the property as a field office and that the equipment, warehouses and racks were used for all of their operations and not alone for those on respondents’ property.